World Bank Warns China Headed for Crisis

The World Bank says that China's economy will be derailed by 2030 if it doesn't commercialize its powerful state-owned enterprises. The WSJ's Deborah Kan speaks to Senior Editor Bob Davis.

This transcript has been automatically generated and may not be 100% accurate.

... the ... well Bank is warning that China faces a severe economic crisis unless it reforms in state and enterprise as ... I'm Deborah con you watching Asia today I'm joined now by Bob Davis senior editor in Beijing ... OK Bansal How shattering is this report considering ... many people know that China's as an EADS have too much power in many sectors ... I think it is in his report he is ... in part ... who puts it out it's the World Bank ... but it's also part of the Chinese government the Bellman Research ... Committee and ... that that the VRC is a think tank the reports to the State Council ... so while the recommendation during her broker a novel ... but it's more of that they have some purple crowd behind ... so can we assume that this report may very well become part of China's economic plan in future ... I think that's the hope that people we can see is that it will be on the table when they discuss the economic plan ... and ... the store could be the leaders decide they should say I mean that's what everyone wants to find out I mean the other newbies leaders coming and then ... and this will be one of the options before them ... so of the report recommends as the EU to operate more like commercial ... firms on I'm assuming that means privatization about what other recommendations ... well look what they would reckon any is that ... state enterprises be overseen by asset managers ... the idea is to put a buffer between the companies ... and the state on one hand and then that the asset manager Brian ... the state-owned enterprises that they were commercial ventures so ... if you have a oil company that owns the hotel chain ... or ... cement company that owns the department store they sell that ... stuff all ... and have them focus more on their core ... product ... that would also open up the hope is to open up competition ... in ... both the Haramain lighting businesses and in the areas of the spinoff is well ... so um what do you think the biggest challenge to these reforms may be ... the toughest challenges their enterprises are very very powerful politically ... when they were earlier generations are informed having to use their own companies ... coming losing money due on the back they had no ... way they can get ... that they are some of the most profitable companies in the world's largest most profitable companies in the world ... what is not a lot of ... of ... people in the sale coming saying she ... if she give up some of our power ... for the regulators that ... saying the same things to be a very tough ... political Islam ... okay thanks very much Bob Davis in Beijing I'm Deborah con you watching Asia Today ...